Responding to economic challenges 1918-79

• lost of international status as leading nation
• decline of exports
• 20% merchant shpiping sunk
• Forced to borrow £850 million 
• inflation increased by 25%
• 3.5 million people receiving some sort of benefit or war pension/allowance
• 9% men under 45 had died during the war 

• depression 
• December 1920 (unemployment = 700,000)
• DLG: taxes raised every year to try and repay debts quickly 
• Geddes Axe (cuts in spending to education, unemployment benefits, housing health etc)
• 1923: protectionism + tariffs 
• desire to defend failing industries meant britain was placed behind foreign competitors 
• high interest rates 
• return to the gold standard - 1925
• unemployment = high (never fell below 10%) 

• 1929 = Wall Street crash 
• MacD proposed more cuts in 1931
• £80 million loan used up 
• left gold standard on 18th sept 1931
• £ value fell 
• exports became cheaper
• intrest rate cut 
• "cheap money"
• housing boom "metroland" + new jovs 
• 1935 = rearmerment (15% unemployed found jobs)
• Britain didnt suffer as much as us and europe from depression 

• 'total war' 
• 8.5 million essential work orders (forced to do particular jobs)
• 3.2 million = munitions, 4 million in other war work, 5.5 million conscripted into armed forces 
• people accepted the need for gov planning and managed economy + acceptance of Keynesian policies 
• collective struggle 
• beverige report + landslide victory for labour (1945)
• movement towards consensus politics 
• labour = huge war debts 
• labour had promises of a 'new Jerusalem' 
• maintained rationing and austerity 
• forced to devalue £(1949)

• butskellism 
• nationalism 
• Tory's accepted labours reforms and adopted same Keynesian to managing economy 
• prosperity + age of affluence "never had it so good" 

problems;

• inflation (stop-go economics failed to prevent it)
• ROBOT was dropped in 1952
• unemployment 
• slow growth for economy 
• lack of investment into research and development. In areas other than nuclear defence 
• stagflation (both inflation and unemployment rising at the same time)

• wilson and failure to produce 'white heat' in industry and tech 
• DEA failed under George Brown 
• concorde was a sucess
• minitry of tech lacked funding and authority 
• maintained stop-go 
• Wilson inheritied huge debts - but didn't want to devalue £
• '£ in your pocket bradcast' - 1967 (damaged credibility)
• 1967 - Britain goes to IMF for the second bailout in 3 years 
• 1972 - £ allowed to float freely 
• 1973 OPEC oil crisis, 1974 - oil risen by 400%
• more inflation, higher costs of living 
• jan 1st to march 7th = 3 day week (1974)
• unemployment rising
• IMF 3rd bailout 
• winter of discontent (1978-79)